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Transcript: Katsuhiko Machida, President of the Sharp Corp.

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OSAKA, Japan (CNN) -- This is today's frontline in the battle of the electronics giants. Flat screen TVs are among the fastest moving consumer electronics products in the world. For one company flat-screens are more than a hot product, they're a virtual corporate life-saver. Sharp is now the world's biggest maker of liquid-crystal display televisions. But it wasn't that long ago that the company based in Osaka, Japan had lost its way. Profits had fallen sharply, the brand was limp and the future looked bleak. What it needed was radical corporate surgery and the doctor and savior as it turned out was the new president. Katsuhiko Machida spent 29 years at Sharp before taking the top job in 1998. And he took a huge gamble early on in his presidency by deciding to focus Sharp on flat-screen televisions and shut down many other product lines. He spoke to CNN's Andrew Stevens.

Machida: I was not 100% but about 60% confident that we could succeed making LCD TVs instead of cathode-ray tube televisions. But we faced many technical problems at the time.

Stevens: You said you were 60% sure of its success, that means you must have had a lot of sleepless nights, you must have been worrying have I made the wrong decision?

Machida: At the time people inside and outside of the company, including the mass media, thought this "LCD" strategy would be impossible. So yes I spent many sleepless nights. At that time I knew I needed to at least get my employees to follow this idea. That's why I made an extra effort to spread and share this vision among our employees. But our employees also realized that the president has made this decision and so there was no way of going back.

Stevens: Do you think this is the model that corporate Japan should follow then to focus on one or two distinct products rather than a broad range?

Machida: In the past, generally speaking, Japanese electronics manufacturers had a tendency to go in all directions in terms of general product development and manufacturing business models. Japanese manufacturers had advanced technology but gradually lost their confidence because other Asian electronics makers started to improve their technology levels. So it is no longer the age that electronics makers should go in all directions. You have to focus in a specific area.

Stevens: Many people would say it is too risky being identified, focusing on just one product that you need a wider range you need diversification.

Machida: You are absolutely right. Relying on one single business is too risky. That's why we are thinking about the next pillar of the business and we see solar energy components as our next core business.

Stevens: So how do you motivate your employees? How do you keep them focused, how do you keep them happy?

Machida: I think the point is to provide engineers and all employees with pride, to give them a challenge to create products or technologies that have never existed before. By creating brand new technologies and products, we can contribute to mankind and society. And how do I do it? I think the most important aspect is top management. I personally have to hold the vision and convey this vision to the employees and get their support.

Stevens: I have read you were a Nordic skier, a cross country skier, that is a pretty brutal sport. Is there any way you have incorporated doing that into your business management style?

Machida: Yes. Nordic skiing is such a tough sport. Once you are on a mountain side, nobody is watching you. If you get lost with no one else there, you will only be defeated by yourself. It is very important to work hard even if no one else is watching. So you have to have self-discipline. I also learned about strong spiritual power and personal toughness. This toughness has been very valuable to me in my business activities.


Katsuhiko Machida

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